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Media Ownership: Data Dodges and Double Standards

By Joseph Miller

Deregulatory initiatives seem to move much faster at the FCC than efforts to improve media ownership diversity. The FCC is expected to relax its long-standing blanket ban on the ownership of a broadcast station and a newspaper in the same market even though minority and female media ownership data on how it will affect “viewpoint diversity” is sparse. Relaxing the newspaper-broadcast cross-ownership rule (NBCO) seems inconsistent with federal case law requiring the agency to gather enough background information on minority and female media ownership before changing other media ownership rules.

Congress has mandated that the FCC must review its media ownership rules every four years (i.e.“quadrennially”), to ensure enforcing the rules remains in the public interest. The current Quadrennial Review began in 2010 and the Commission issued proposed rules last December. Among these proposed rules is a relaxation of NBCO.

This is not the first time the FCC has attempted to relax NBCO. In 2008, following its 2006 Quadrennial Review, the FCC went so far as to issue an order relaxing NBCO. That time, however, the U.S. Court of Appeals for the Third Circuit, in Prometheus II, sent the new rules back to the Commission because the Commission had not complied with Administrative Procedures Act (APA) provisions requiring federal agencies to notify the public that new rules have been proposed and allowing the public to comment on the proposed rules before issuing a final order.

The current proposed rule from the 2010 Quadrennial Review to relax NBCO would end the complete ban on owning a newspaper and broadcast station in the same market by allowing exceptions to the rule in instances where owning a newspaper and broadcast station in the same market would “carry public interest benefits.” The FCC would assess, on a case-by-case basis, whether proposals to own a broadcast station and a newspaper in the same market affect “viewpoint diversity”. This time, the rule underwent the APA-mandated notice and comment process, and the FCC is expected to vote on the final order before the end of the year. FCC Chairman Julius Genachowski sent a draft of the NBCO order to the 4 other FCC Commissioners on Wednesday.

But the Court in Prometheus II also ruled that the FCC failed to “examine the relevant data [on broadcast ownership by minorities and women] and articulate a satisfactory explanation” fordefining a term in a different proceeding. In its 2008 Diversity Order, the FCC defined the meaning of the term “eligible entities” to give effect to several rules applying to prospective buyers of broadcast stations. In enacting these rules, the FCC claimed they would increase the number of stations owned by minorities and women. But the Court reasoned that the FCC provided no data on minority and female ownership that would support its claim that its eligible entity rules would lead to an increase in minority and female station ownership. In fact, the Court held, the FCC’s eligible entities definition was not likely to have an effect on minority and female media ownership at all. The Court thus concluded that the eligible entity definition was “arbitrary and capricious” and remanded it, along with the APA-deficient NBCO rules, back to the FCC.

It could similarly be argued that the FCC has not used minority and female audience data to satisfactorily explain the effect that relaxing NBCO would have in improving viewpoint diversity, since minority and female ownership data is an element of viewpoint diversity. As the Court noted in Prometheus II, the FCC has itself maintained that “diversification of ownership would enhance the possibility of achieving greater diversity of viewpoints.”

It has taken nearly two decades for the FCC to release a 16-page report on minority and female media ownership. Also on Wednesday, the FCC issued a long-awaited minority and female media ownership report showing that white media ownership increased while minority media ownership decreased. Blacks own just .7% of commercial television stations, compared to the 69.4% of television stations owned by whites. Latinos own just 2.9% of commercial TV stations. Whites also own 80% of AM and FM stations. But this report comes 17 years after the Supreme Court decided Adarand v. Peña, in which the Court held that laws including racial classifications must satisfy “strict scrutiny.” This standard requires the FCC to exhaust race neutral alternatives before considering race conscious initiatives to improve minority media ownership. The short report the FCC released on Wednesday is but a small step toward fulfilling that mandate. Indeed, the report suggests that revising NBCO would actually hurt viewpoint diversity even further by bolstering large newspapers and broadcast outlets even as minority and female ownership has stagnated and, in some cases, declined.

Why should the FCC be required to develop such a robust database on minority and female ownership to support its eligible entities definition but not its changes to NBCO? More than 200 civil rights organizations had the same question, which is why they filed a letter at the Commission last week urging it to consider minority and female media ownership when it revises any of its media ownership rules.

This is no time for the FCC to procrastinate even further in developing a reliable database on minority and female media ownership. It should begin to do so immediately, before it relaxes anymore ownership rules and further dilutes the weight of minority and female ownership data.

Joseph Miller, Esq., is Deputy Director and Senior Policy Counsel for the Media and Technology Institute at the Joint Center for Political and Economic Studies. More information on Mr. Miller and his work can be found at the Joint Center website.